Your company may buy a used pick-up for $25,000. During the truck's five year useful life, it is estimated the firm will save $4,000 per year after all of the costs of owning and operating the truck have been paid. The truck's salvage value is estimated to be $3,000. Assume straight line depreciation and a tax rate of 35%. Assume r of 10%.

Using the above information I have a depreciation of -$4,400 and an annual savings of $4,000. For an annual cash flow of -$400. How do I tax negative cash flows? Or am I amusing that the $4,000 is the total after deprecation? Which means use $8,400 for my annual income?